Part of Horse Previews Magazine website. Posted on 12/03/98; 2:00:00PM.

The Fine Print

Be Sure About Your Insurance!

This hyperbole, comical but untrue, comes from my reading the September, 1998 article "Equine Insurance... What you don't know might hurt you." By Tonna K. Tharp, in The Northwest Horse Source. The subject of insurance is plenty dry, but reading about it is drier. The following incidents and their outcomes are rendered here to prove that you aren't necessarily damned if you do.. but you certainly are damned if you don't - have insurance.

Owner: Stew's Stallion Stable

Insurer: Fidelity Bonkers

Coverage: Farm Liability and Stallion Liability

Incident: Recently gelded 3 year old, orphaned at birth and raised on goat's milk has affinity for mother goats. Lost visitor pulls into driveway in a brand new pickup with a trailer load of goats asking for directions. Gelding attacks and demolishes pickup, tips over goat trailer. Goats run off.

Claim: Visitor sues owner for damages to pickup & trailer, plus value of scattered goats, plus suffering & humiliation: Total $78,000

Outcome: Court denies coverage rendering stable solely responsible for $78,000. Visitor granted complete damages against owner, insurance company exonerated. Fidelity Bonkers agent files harassment law suit against Stewart and his stable hand.

Reasoning: Liability coverage, specifically the horse exclusion endorsement where applicable to stallions, was not in effect because the horse was no longer a stallion. Since the owner of the stallion liability policy had gelded that particular stallion, he had no claim.

Owner: Bob's Horse Farm

Insurer: Glue Shield

Coverage: Auto Liability & Equine Mortality

Incident: While Bob transports mare to Fairgrounds, lightning strikes horse trailer, fire breaks out engulfing trailer, exposing electrical wiring; Bob drives through car wash to douse fire, mare electrocuted.

Claim: Bob claims $7500 damage to vehicles; $2500 cash value for mare at time of death. Total: $10,000.

Outcome: Coverage denied. Citation issued

Reasoning: Bob's Auto liability insurance covered acts of God other than lightning. Plus, the license plates on his trailer had expired. Glue Shield was unable to determine the actual cash value of the mare at time of death because their representative was not on the scene to evaluate the extent of burn injuries prior to electrocution. Bob had failed to update the "agreed value endorsement" section of his policy, plus he had neglected to check the "Combined Perils" box in the last section of the written policy. Glue Shield was only legally required to cover "Specific Perils" as individually defined.

Owner: Acher's Acres

Insurer: Acme Equine Trust

Coverage: Loss of Use Supplement to Mortality

Incident: In 1995, Mr. Acher's show horse caught its tail in the threshing machine, pretty well ruining the Fall Show season. In 1997, the fully recovered horse nearly drowns in the ice pond, suffering a debilitating lung ailment which ended its show career.

Claim: 60% of the value ($10,000) of the horse: Total: $6,000

Outcome: Acme completely denies coverage and adds $100 penalty to insurance premium for claim administration cost.

Reasoning: Claim fell without the typical time frame for processing. Acme requires instant notification of all minor injuries, illnesses, or incidents. Failure to report the threshing incident, even though the show horse's tail had fully recovered by the time of the near fatal drowning, was considered a breach of the insurance contract. Mr. Acher's loss of temper over the outcome was construed as unacceptably offensive behavior warranting punitive costs for administration.

Owner: Fantasy Stables

Insurer: State Harmless

Coverage: Infertility

Incident: Prize stallion feels jilted by naugahyde cover on breeding dummy, motility goes to zero.until a different dummy installed and mounted.

Claim: Lost breedings for 10 mares at $400 each, plus cost to replace breeding dummy: Total $5,000.

Outcome: Complete denial of coverage. Additional $600 fee adjusted to State premium for investigation cost. Owner arrested and incarcerated for verbal abuse of claims adjuster.

Reasoning: Guarantee that insured stallion would achieve 80% conception percentage rate was voidable due to unauthorized naugahyde covering on breeding dummy. No original copy of the insurance policy could be found. Owner failed to submit a most recent copy of motility microscope calibration to State Harmless for approval.

Bob Howdy, PhD

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